Hurricane Katrina: Status of Hospital Inpatient and Emergency
Departments in the Greater New Orleans Area (29-SEP-06,
GAO-06-1003).
In the aftermath of Hurricane Katrina, questions remain
concerning the availability of hospital inpatient care and
emergency department services in the greater New Orleans
area--which consists of Jefferson, Orleans, Plaquemines, and St.
Bernard parishes. Because of broad-based congressional interest,
GAO, under the Comptroller General's statutory authority to
conduct evaluations, assessed efforts to restore the area's
hospitals by the Department of Homeland Security's (DHS) Federal
Emergency Management Agency (FEMA); the Department of Health and
Human Services (HHS); and the Louisiana State University (LSU)
public hospital system, which operated Charity and University
hospitals in New Orleans. GAO examined (1) the availability of
hospital inpatient care and the demand for emergency department
services, (2) steps taken to reopen Charity and University
hospitals, and (3) the activities that HHS has undertaken to help
hospitals recover. To fulfill these objectives, GAO reviewed
documents and interviewed federal officials and hospital, state,
and local officials in the greater New Orleans area. GAO also
obtained information on the number of inpatient beds for April
2006, which was the most recent data available when GAO did its
work. GAO's work did not include other issues related to
hospitals such as outpatient services or financial condition.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-1003
ACCNO: A61611
TITLE: Hurricane Katrina: Status of Hospital Inpatient and
Emergency Departments in the Greater New Orleans Area
DATE: 09/29/2006
SUBJECT: Cost analysis
Disaster recovery
Emergency medical services
Health care facilities
Health care personnel
Health care services
Health centers
Hospital bed count
Hospital care services
Hospital planning
Hospitals
Hurricane Katrina
Patient care services
Inpatient care services
New Orleans (LA)
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GAO-06-1003
* Results in Brief
* Background
* Sufficient Staffed Beds Existed for All Types of Inpatient C
* Staffed Beds per 1,000 Population Exceeded National Average
* Occupancy Rates Were Higher Than They Were before Hurricane
* Recruiting, Hiring, and Retaining Hospital Staff Posed Signi
* Hospitals Reported High Demand for Emergency Department Serv
* Steps Have Been Taken to Reopen University Hospital, but LSU
* LSU's Cost Estimates for Repairing Charity and University Ho
* Repairs to University Hospital Are Under Way, and LSU Is Pur
* LSU Has Established Temporary Facilities to Provide Public H
* HHS Has Provided Financial and Technical Assistance and Prog
* Agency Comments
* GAO Contacts
* Acknowledgments
* GAO's Mission
* Obtaining Copies of GAO Reports and Testimony
* Order by Mail or Phone
* To Report Fraud, Waste, and Abuse in Federal Programs
* Congressional Relations
* Public Affairs
Report to Congressional Committees
United States Government Accountability Office
GAO
September 2006
HURRICANE KATRINA
Status of Hospital Inpatient and Emergency Departments in the Greater New
Orleans Area
GAO-06-1003
Contents
Letter 1
Results in Brief 4
Background 7
Sufficient Staffed Beds Existed for All Types of Inpatient Care Except
Psychiatric Care; High Demand Existed for Emergency Department Services 10
Steps Have Been Taken to Reopen University Hospital, but LSU Has No Plans
to Reopen Charity Hospital 17
HHS Has Provided Financial and Technical Assistance and Program Waivers to
Help Address Restoration 24
Agency Comments 29
Appendix I Scope and Methodology 33
Appendix II Comments from the Department of Health and Human Services 36
Appendix III GAO Contacts and Staff Acknowledgments 39
Tables
Table 1: Status of Acute Care Facilities in the Greater New Orleans Area,
April 25, 2006 8
Table 2: Number of Available, Staffed, and Occupied Beds by Type of Care
at Hospitals in the Greater New Orleans Area on April 25, 2006 15
Table 3: LSU's and FEMA's Cost Estimates for Charity and University
Hospitals 19
Figure
Figure 1: Open and Closed Hospitals in the New Orleans Area as of June
2006 12
Abbreviations
ADA Americans with Disabilities Act ADAMS ADAMS Management Services
Corporation CMS Centers for Medicare & Medicaid Services COSG
Collaborative Opportunities Study Group DHS Department of Homeland
Security FEMA Federal Emergency Management Agency HHS Department of Health
and Human Services LSU Louisiana State University MCLNO Medical Center of
Louisiana at New Orleans OFPC Office of Facility Planning and Control SSBG
Social Services Block Grant VA Department of Veterans Affairs
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.
United States Government Accountability Office
Washington, DC 20548
September 29, 2006
Congressional Committees
Hurricane Katrina, which made landfall near the Louisiana-Mississippi
border on the morning of August 29, 2005, and the subsequent flooding
caused by the failure of the New Orleans levee system resulted in one of
the largest natural disasters ever to hit the United States. Among the
challenges facing the greater New Orleans area1 in the aftermath of
Hurricane Katrina is addressing the significant damage to hospital
facilities, the loss of hospital staff who relocated to other areas, and
the associated disruption of hospital inpatient care and emergency
department services. For example, Charity and University hospitals, which
are part of the statewide Louisiana State University (LSU) public hospital
system, suffered extensive damage as a result of the hurricane and
remained closed as of June 30, 2006.2 Private hospitals serving the area
were also damaged and, like their public counterparts, have been short of
nursing and support staff in the months following the hurricane.
In responding to a natural disaster such as Hurricane Katrina, the federal
government coordinates operations with state and local governments and the
private sector according to the framework provided in the National
Response Plan.3 Under this plan, the Department of Homeland Security's
(DHS) Federal Emergency Management Agency (FEMA) has primary
responsibility for emergency response and recovery planning and
coordination, and the Department of Health and Human Services (HHS) has
overall responsibility for coordinating public health and medical response
to incidents. HHS is also designated as a support agency for long-term
community recovery and mitigation.
1For this report, we define the greater New Orleans area as Jefferson,
Orleans, Plaquemines, and St. Bernard parishes.
2While part of the statewide LSU public hospital system, Charity and
University hospitals are the two facilities that make up the Medical
Center of Louisiana at New Orleans (MCLNO). MCLNO, through these hospitals
and other facilities, is a primary provider of care to the uninsured
population in New Orleans.
3The National Response Plan establishes a comprehensive all-hazards
approach to enhance the ability of the United States to manage domestic
incidents. It establishes a framework of how the federal government
coordinates with state, local, and tribal governments and the private
sector during incidents.
In March 2006, we reported on the status of the health care system in New
Orleans as of that month.4 As we reported, the availability of health care
services-which includes those provided within and outside of a hospital
facility-is one of the factors that can affect whether and how quickly
residents return to an area after a disaster.5 This report is a follow-up
to our March 2006 report and focuses on hospital inpatient care; emergency
department services; and efforts to restore hospital infrastructure, that
is, facilities and staff. Specifically, this report discusses (1) the
availability of hospital inpatient care and the demand for emergency
department services in the greater New Orleans area, (2) steps taken by
FEMA and LSU to reopen Charity and University hospitals, and (3) the
activities that HHS has undertaken to help hospitals recover in the
greater New Orleans area. Because of broad congressional interest, we
performed this work under the Comptroller General's statutory authority to
conduct evaluations on his own initiative.6
To examine the availability of hospital inpatient care and the demand for
emergency department services, we contacted nine operating public and
private acute care hospitals7 in the greater New Orleans area to obtain
information on the number of available, staffed, and occupied beds8 for
one randomly selected day in April 2006, and later we asked the hospital
officials to provide the same information for the entire month of April,
which was the most recent data available when we did our work.9 Five
hospitals responded to our request for data for the month of April. We
also obtained hospital estimates of the occupancy rates for the 12-month
period prior to, and the 9-month period after, Hurricane Katrina for 8 of
the 9 open hospitals. To determine the April 2006 population of the four
parishes in the greater New Orleans area, we used estimates from the
Louisiana Department of Health and Hospitals Bureau of Primary Care and
Rural Health, which used two methodologies to estimate the population in
each of the parishes. It used school enrollment data for Jefferson, St.
Bernard, and Plaquemines parishes; and for Orleans Parish it used a survey
of persons occupying residential structures. The survey had been conducted
by the New Orleans Health Department in consultation with the Centers for
Disease Control and Prevention. To examine the demand for emergency
department services, we obtained information on emergency room wait times
for 6 hospitals and the number of times that 8 hospitals diverted patients
to other facilities for the 30-day period from March 28, 2006, through
April 26, 2006. We limited our work to examining the status of hospital
inpatient and emergency departments in the greater New Orleans area and
did not examine other aspects of hospital services, such as outpatient
services or the financial condition of the hospitals. We also did not
address other issues related to the health care system, such as the status
of primary care, medical research, or graduate medical education.
4See GAO, Hurricane Katrina: Status of the Health Care System in New
Orleans and Difficult Decisions Related to Efforts to Rebuild It
Approximately 6 Months after Hurricane Katrina, GAO-06-576R (Washington,
D.C.: Mar. 28, 2006).
5Other factors include, for example, availability of housing, food,
schools, and transportation.
6See 31 U.S.C. S: 717(b)(1).
7Acute care hospitals treat individuals whose illnesses or health problems
are short-term or episodic in nature.
8Available beds are beds that are licensed, set up, and available for use.
These are beds regularly maintained in the hospital for patient use with
supporting services, such as food, laundry, and housekeeping. Available
beds may or may not be staffed. Staffed beds are available beds for which
staff are on hand to attend to patients who occupy the beds. Staffed beds
may or may not be occupied. Occupied beds are staffed beds that are being
used by patients.
9Ten hospitals were operating as of June 30, 2006, but we did not include
one of them, Elmwood Medical Center, in our survey of available, staffed,
and occupied beds because it is a temporary facility that was open for
only 7 days in April and therefore data were not available for the entire
month.
To determine the steps that have been taken to reopen Charity and
University hospitals-two public facilities eligible for federal disaster
assistance-we reviewed LSU's and FEMA's damage assessments and cost
estimates for the hospitals and LSU correspondence to FEMA regarding
potential federal funding. We also reviewed FEMA regulations and guidance
pertaining to disaster assistance. We toured Charity and University
hospitals to examine the damage to these facilities. We also toured two
temporary facilities that provided hospital outpatient care and emergency
department services. These two facilities, established by LSU, were the
Elmwood Medical Center and the Medical Center of Louisiana at New Orleans
(MCLNO) Emergency Services Unit.
To determine the activities undertaken by HHS to help hospitals recover,
we reviewed documents outlining HHS programs and activities related to
helping restore hospital inpatient care and emergency department services
after a disaster. We also reviewed written summaries created by HHS
officials to document department activities to help restore hospital
inpatient care and emergency department services after Hurricane Katrina.
In addressing all three objectives, we interviewed officials from HHS,
FEMA, LSU (including LSU's Health Care Services Division, which manages
the public hospitals in the greater New Orleans area), and seven of the
nine hospitals that we contacted in the greater New Orleans area. We also
interviewed officials from the Department of Veterans Affairs (VA) because
VA is considering building a joint hospital complex with LSU in New
Orleans, the Louisiana Recovery Authority because it is the planning and
coordinating body that was created in the aftermath of Hurricane Katrina
by the Governor of Louisiana to plan for recovery and rebuilding efforts,
and Louisiana's Office of Facility Planning and Control (OFPC) because it
is administering the design and construction of all Louisiana state-owned
facilities damaged by Hurricane Katrina. We did not independently verify
information we received from hospitals in the greater New Orleans area. We
conducted our work from April 2006 through September 2006 in accordance
with generally accepted government auditing standards. See appendix I for
more information about our scope and methodology.
Results in Brief
While New Orleans continues to face a range of health care challenges,
hospital officials in the greater New Orleans area reported in April 2006
that a sufficient number of staffed inpatient beds existed for all
services except for psychiatric care-some psychiatric patients had to be
transferred out of the area because of a lack of beds. Overall, as of
April 2006, the greater New Orleans area had about 3.2 staffed beds per
1,000 population, compared with the national average of 2.8 staffed beds
per 1,000 population reported by the American Hospital Association.
Hospital officials told us that they planned to open an additional 674
staffed beds by the end of 2006-390 of which would be at University
Hospital-although they also reported that recruiting, hiring, and
retaining nurses and support staff was a great challenge. With the
addition of these beds, the population would have to increase from 588,000
in April 2006 to 913,000 by December 2006 before staffed beds would drop
to the national average. For all types of care, eight of the nine
hospitals we contacted provided us with an estimated overall occupancy
rate for the 9-month period following the hurricane (through April 2006)
and for the 12-month period before the hurricane. The hospitals' occupancy
rates for the 9-month period after the hurricane ranged from 45 percent to
100 percent, or an average of 77 percent, compared with a range from 33
percent to 85 percent, or an average of 70 percent, for the 12-month
period before the hurricane. The American Hospital Association reported
that the average monthly hospital occupancy rate nationwide was 67 percent
in 2004. Eight of the nine hospitals that remained open after Hurricane
Katrina also reported a high demand for services in their emergency
departments, similar to the nationwide trend reported by the Institute of
Medicine in June 2006 that emergency department crowding is a nationwide
problem.
Steps have been taken to reopen University Hospital, but as of July 2006,
LSU had no plans to reopen Charity Hospital. FEMA and LSU have prepared
damage assessments and cost estimates for these hospitals, some repairs
have begun at University Hospital, and temporary facilities have been
established to provide some services previously offered at both hospitals.
FEMA's cost estimates are considerably lower than LSU's estimates. For
example, LSU estimates the cost of repairing Charity Hospital at about
$258 million, while FEMA estimates the cost at about $27 million. The
difference between these two estimates is primarily due to two factors.
First, LSU's estimate covers whole building repair, meaning that it
includes repairing damage from Hurricane Katrina as well as correcting
many deficiencies that had been identified before the hurricane. In
contrast, FEMA's estimate covers repair costs for hurricane damage from
flooding and wind only, since these are the only repair costs eligible for
federal reimbursement. Second, in anticipation of a shortage of materials
and labor over the next 3 to 6 years as a result of the hurricane, LSU's
estimate includes a 66 percent cost escalation over a commonly used index
of labor and material for New Orleans, while FEMA's estimate does not
include such a cost escalation. According to FEMA, a cost escalation for
materials and labor was not warranted based on FEMA's recent contracting
experience in the area. Repairs are currently under way to reopen portions
of University Hospital (e.g., inpatient beds and a pharmacy) beginning in
late September or early October. As of July 2006, LSU had no plans to
reopen Charity Hospital. Rather, LSU is pursuing the possibility of a new
facility to replace both Charity and University hospitals in the future.
If LSU decides to replace these hospitals, a portion of the funds FEMA
authorized for repair may be used to build this new hospital. The amount
of federal funding available for a new hospital will depend, in part, on
FEMA's initial estimated cost to repair Charity and University hospitals.
In the meantime, LSU has established temporary facilities to provide some
of the hospital functions previously provided by Charity and University
hospitals in the short term, including an emergency services unit and a
trauma center.
HHS has been able to provide financial and technical assistance and has
waived certain program requirements in order to help hospitals recover in
the greater New Orleans area. HHS financial assistance included $221
million in hurricane relief funds designated for Louisiana through Social
Services Block Grants (SSBG); some of these funds may be used to
reconstruct health care facilities. As of June 13, 2006, HHS was
considering four applications from the greater New Orleans area for a
Medicare extraordinary circumstances exception, which allows hospitals
serving Medicare patients to apply for long-term reimbursement for capital
expenditures of greater than $5 million to repair hurricane-damaged
facilities. Technical assistance to Louisiana is both ongoing and planned.
Ongoing technical assistance has included providing consultation at
Orleans Parish health planning committee meetings that addressed shortages
of staff, hospital beds, and funding, and collaborating with survey
agencies and hospitals to coordinate the application of accreditation
standards for temporary hospital facilities or hurricane-damaged
facilities. Planned technical assistance is part of a broader effort to
help redesign Louisiana's health care delivery system, including the
restoration of inpatient care and emergency department services in the
greater New Orleans area. HHS officials said that this could include
assisting Louisiana in development of future requests for Medicare
demonstrations and Medicaid waivers designed to make Louisiana's health
care system more effective and efficient. HHS has also waived certain
Medicare billing and other requirements and accelerated Medicare payments
to providers, including hospitals, in the hurricane-affected states such
as Louisiana.
Based on information provided by hospital officials, we believe a major
challenge facing the greater New Orleans area is to attract sufficient
nurses and support staff to operate the beds that are currently available.
Since the number of staffed and available inpatient beds in the greater
New Orleans area is above the national average, local and state officials
are afforded time to deliberate the appropriate location and numbers of
hospital facilities. Although LSU officials would prefer to construct a
new hospital facility to replace Charity and University hospitals,
decisions on the future of these hospitals and the overall provision of
health care in New Orleans ultimately will be made at the highest levels
of the state government. A number of federal, state, and local
stakeholders will also have input into these final decisions. The
decisions made will depend on a variety of factors. In addition to the
major challenge of attracting and retaining hospital staff, other
challenges will include the availability of funding, the health care needs
of the population that returns to the city, and the state's vision for the
future of its health care system. Finally, as restoration of hospital
inpatient care, emergency services, and hospital infrastructure proceeds,
HHS's efforts to conduct demonstrations and to waive certain program
requirements will continue to be an important factor in addressing health
care needs in the greater New Orleans area.
In commenting on a draft of this report, HHS and VA agreed with the draft
report. DHS said it had no formal comments on the draft report. HHS, VA,
DHS, and Louisiana's Department of Health and Hospitals provided technical
comments, which we incorporated where appropriate. LSU did not provide
comments.
Background
Before Hurricane Katrina, 16 acute care hospitals operated in the greater
New Orleans area. These hospitals included public as well as private
for-profit and not-for-profit facilities. Because of the hurricane and
resulting flooding, 7 hospitals remained closed as of June 2006. (See
table 1.)
Table 1: Status of Acute Care Facilities in the Greater New Orleans Area,
April 25, 2006
Available Staffed Occupied
beds beds beds Type of facility
Facilities in New Orleans
(Orleans Parish)a
Charity Hospital Closed Closed Closed Public
Children's Hospital 201 143 101 Not-for-profit
Lindy Boggs Medical Center Closed Closed Closed For-profit
Memorial Medical Center Closed Closed Closed For-profit
Methodist Hospital Closed Closed Closed Not-for-profit
New Orleans VA Medical Center Closed Closed Closed Federal
Touro Infirmary 297 255 240 Not-for-profit
Tulane University Hospital and 73 73 64 Not-for-profit
Clinic
University Hospital Closed Closed Closed Public
Total 571 471 405
Facilities outside of New
Orleans (Jefferson and St.
Bernard parishes)b
Chalmette Medical Center Closed Closed Closed For-profit
East Jefferson General 444 430 430 Public
Hospital communityc
Kenner Regional Medical Center 205 74 64 For-profit
Meadowcrest Hospital 172 116 102 For-profit
Ochsner Medical Center 498 432 394 Not-for-profit
Tulane-Lakeside Hospital 82 62 28 For-profit
West Jefferson Medical Center 356 293 265 Public
communityc
Total 1,757 1,407 1,283
Total for the greater New 2,328 1,878 1,688
Orleans area
Source: GAO analysis of documentation and interviews with hospital
officials.
Notes: The greater New Orleans area consists of Jefferson, Orleans,
Plaquemines, and St. Bernard parishes. We did not include Elmwood Medical
Center, a trauma center in Jefferson Parish, because it is a temporary
facility that opened on April 24, 2006, after our survey began.
aNew Orleans and Orleans Parish have the same geographical boundaries.
bPlaquemines Parish did not have an acute care hospital before Hurricane
Katrina.
cEast Jefferson General Hospital and West Jefferson Medical Center are
publicly owned, not-for-profit community service district hospitals
organized by the parish and governed by boards of directors. These
hospitals are not part of the statewide system of 10 public hospitals.
Charity and University hospitals are part of the statewide system of 10
public hospitals. Charity Hospital, which served as a Level I trauma
center,10 was built in 1937. University Hospital was built in 1972. These
hospitals served as the primary health care safety net for many local
residents. About half of the patients served by these hospitals were
uninsured, and about one-third were covered by Medicaid, the federal-state
program for financing health care for certain low-income individuals.
Charity and University hospitals served as a major state resource through
training programs for professionals in medicine, nursing, dentistry, and
public health.
Charity and University hospitals are eligible for federal aid under the
Public Assistance program managed by FEMA to help repair the damage caused
by Hurricane Katrina. This program, authorized by the Stafford Act,
provides grants to pay up to 90 percent of the costs of restoring a
facility to predisaster condition.11 A facility is considered repairable
when the cost of repairing disaster damages does not exceed 50 percent of
the cost of replacing the facility and it is feasible to repair the
facility so that it can perform the function for which it was being used
as well as it did immediately prior to the disaster.12 Although initial
grant obligations are based on FEMA's estimate of the costs of repairs to
restore the facility to its predisaster condition, reimbursements are
based on actual, documented repair costs, which could be higher than the
original estimate. Alternatively, if FEMA's estimated repair costs exceed
50 percent of its estimated replacement costs, FEMA is authorized to grant
up to 90 percent of its estimated replacement costs to replace a facility.
There is a possibility for additional federal reimbursements under the
Public Assistance program for required code upgrades that are triggered by
the repairs. Code upgrades, although eligible for reimbursements, are not
included in determining whether repair costs exceed 50 percent of
replacement costs. In the event that FEMA's estimated repair costs do not
exceed 50 percent of its estimated replacement costs and a decision is
made to replace rather than repair, funds authorized for repair may be
used to build a new hospital, but reimbursements will be limited to 90
percent of FEMA's estimated cost to repair and restore the original
facility to its predisaster condition. In addition, projects for hazard
mitigation to prevent damage in future flooding events are eligible for
Public Assistance funding.
10Trauma centers are designated based on resources and expertise to treat
injuries of differing types and levels of severity. Level I trauma centers
are able to treat any type of injury, no matter how severe. According to
the American College of Surgeons, a Level I trauma center has a full range
of specialists and equipment available 24 hours a day and admits a minimum
required annual volume of severely injured patients.
11Robert T. Stafford Disaster Relief and Emergency Assistance Act (as
renamed by The Disaster Relief and Emergency Assistance Amendments of
1988, Pub. L. No. 100-707, S: 102(a), 102 Stat. 4689), Pub. L. No. 93-288,
S: 406(c)(1)(B), 88 Stat. 143 (1974) (codified as added and amended at 42
U.S.C. S: 5172(c)(1)(B) (2000).
1244 C.F.R. S: 206.226(f) (2005).
HHS is the federal government's principal agency for protecting the health
of all Americans and providing essential human services. HHS's Centers for
Medicare & Medicaid Services (CMS) administers Medicare, which finances
health care for elderly and certain disabled individuals, and Medicaid. In
its support role for long-term community recovery and mitigation under the
National Response Plan, HHS coordinates federal government health care
support to state, regional, local, and tribal governments; nongovernmental
organizations; and the private sector to enable community recovery, such
as recovery from the long-term consequences of Hurricane Katrina and the
subsequent flooding.
Sufficient Staffed Beds Existed for All Types of Inpatient Care Except
Psychiatric Care; High Demand Existed for Emergency Department Services
In the greater New Orleans area, a sufficient number of staffed hospital
inpatient beds existed for all types of care except psychiatric care;
there was also a high demand for emergency department services. According
to information we obtained from hospital officials, we determined that as
of April 2006 the greater New Orleans area had more staffed beds per 1,000
population than the national average, and over two-thirds of these beds
were within 5 miles of Charity and University hospitals.13 While hospitals
were able to maintain a sufficient number of staffed beds, hospital
officials also reported that recruiting, hiring, and retaining nurses and
support staff, such as nursing aids, housekeepers, and food service
workers, to staff the available beds constituted a great challenge. Eight
of the nine hospitals that remained open after Hurricane Katrina reported
a high demand for services in their emergency departments, not unlike
emergency departments in other parts of the country, which are also
experiencing high demand.
13By way of comparison, Medicare requires that commonly used services
provided by managed care organizations must be available within 30 minutes
of driving time.
Staffed Beds per 1,000 Population Exceeded National Average
According to information we obtained from hospital officials, we
determined that as of April 2006, the greater New Orleans area had more
staffed beds per 1,000 population than the national average. Before
Hurricane Katrina, the population of the greater New Orleans area was
about 1,002,000, with about 455,000 living within the city boundaries of
New Orleans (Orleans Parish). The number of staffed hospital inpatient
beds on hand to serve the people of the greater New Orleans area was
3,958, or about 4.0 staffed beds per 1,000 population, as compared with
the national average of 2.8 staffed beds per 1,000 population reported in
2006.14 The population of the greater New Orleans area remains in flux and
is difficult to estimate, in part due to former residents living outside
the city and returning during the day and workers involved in
reconstruction activities. PricewaterhouseCoopers15 estimated the February
2006 population of the four parishes (Orleans, Jefferson, Plaquemines, and
St. Bernard) to be 578,000, and the Louisiana Department of Health and
Hospitals16 reported estimates of about 569,000 for January 2006 and
588,000 for April 2006. In April 2006, the hospitals in the greater New
Orleans area reported to us that they were able to staff 1,878 of the
2,328 available beds. Based on their reports and the April 2006 population
estimate, we calculated the four parishes had 3.2 staffed beds per 1,000
population and 4.0 available beds per 1,000 population. About 69 percent
of the available beds are within 5 miles of Charity and University
hospitals, and about 91 percent are within 10 miles. Consequently,
patients who live and work within Orleans Parish are close to hospital
services. Figure 1 shows the location of all the hospitals in the greater
New Orleans area, including the nine open hospitals we surveyed.
14American Hospital Association, Hospital Statistics 2006 Edition, 2006
Health Forum LLC. Used with permission. While the national average was
reported in 2006 by the American Hospital Association, it is based on 2004
data, which is the most recent year for which nationwide data are
available.
15PricewaterhouseCoopers, Report on Louisiana Healthcare Delivery and
Financing System (2006). This report was prepared for the Louisiana
Recovery Authority Support Foundation. Used with permission.
16Louisiana Department of Health and Hospitals population estimates for
the four parishes reported by the Greater New Orleans Community Data
Center, Post Katrina Population & Housing Estimates (June 8, 2006).
Figure 1: Open and Closed Hospitals in the New Orleans Area as of June
2006
aElmwood Medical Center is included on the map because it was operating in
June 2006. However, we did not include Elmwood in our survey because it
opened on April 24, 2006, and so data on available, staffed, and occupied
beds were not available for the month of April.
bSymbol placement for New Orleans VA Medical Center and Tulane University
Hospital & Clinic has been altered slightly for legibility purposes.
Furthermore, hospital officials we surveyed told us that they planned to
reopen additional staffed beds by the end of the year. For example, LSU
plans to reopen 166 beds at University Hospital in late September or early
October 2006 and an additional 224 beds by the end of the year for a total
of 390 additional staffed beds. Tulane University Hospital and Clinic
plans to reopen an additional 117 staffed beds by the end of 2006. In all,
hospitals plan to reopen at least 674 staffed beds by the end of 2006.
Given these plans, even if the population of the greater New Orleans area
rises 30 percent by the end of 2006 over the estimated population as of
April 2006, there would be about 3.3 staffed beds per 1,000 population.
This estimate assumes that the estimated population of 588,000 in April
2006 would increase to 764,000 by December 2006. Furthermore, the
population of the greater New Orleans area would have to increase by
325,000 or about 55 percent, to 913,000, by December 2006 before staffed
beds per 1,000 population dropped to the national average of 2.8.
Occupancy Rates Were Higher Than They Were before Hurricane Katrina, but Staffed
Beds Were Sufficient for All Types of Inpatient Care Except Psychiatric Care
Consistent with nationwide data on occupancy rates (occupied beds as a
percentage of staffed beds), information we received on estimated
occupancy rates from hospitals in the greater New Orleans area
demonstrated wide month-to-month fluctuations. Nevertheless, these
hospitals were able to meet the demand for inpatient care, with the
exception, in many cases, of psychiatric care.
Post-Hurricane Katrina hospital occupancy rates in the greater New Orleans
area are higher than they were before the hurricane. For all types of
care, eight of the nine hospitals we contacted provided us with an
estimated overall occupancy rate for the 9-month period following the
hurricane (through April 2006) and for the 12-month period before the
hurricane. The hospitals' occupancy rates for the 9-month period after the
hurricane ranged from 45 percent to 100 percent, or an average of 77
percent, compared with a range from 33 percent to 85 percent, or an
average of 70 percent, for the 12-month period before the hurricane.17 The
American Hospital Association reported that the average monthly hospital
occupancy rate nationwide was 67 percent in 2004, the most recent year for
which nationwide data are available.
17While officials at the ninth hospital reported information on the number
of available, staffed, and occupied beds, they did not provide information
on occupancy rates.
We also obtained actual occupancy rate information from the nine greater
New Orleans area hospitals for one day-April 25, 2006-and five of them18
provided actual daily occupancy rate information for the entire month of
April 2006. The five hospitals reported actual occupancy rates that ranged
from 70 percent to 89 percent (70, 75, 85, 86, and 89 percent).
According to hospital officials, the greatest need was for
medical/surgical care, adult critical care, and psychiatric care beds. For
example, on April 25, 2006, the occupancy rate was 95 percent for
medical/surgical care, 96 percent for adult critical care, and 100 percent
for psychiatric care, compared with rates of 68 percent and 71 percent for
obstetrics care and pediatrics care, respectively. (See table 2.) Hospital
officials also told us that inpatient psychiatric care beds were
frequently not available in the greater New Orleans area and that
psychiatric patients were the only type of patients that had to be
transferred out of the greater New Orleans area because of a lack of beds.
For example, an official at one hospital reported that since Hurricane
Katrina the demand for psychiatric services has overwhelmed that
hospital's 15-bed psychiatric unit, and the hospital has had to house up
to eight psychiatric patients in the emergency department at one time
until psychiatric beds could be found in other facilities. An official at
another hospital reported that sometimes psychiatric patients have stayed
in the emergency department for several days until an inpatient
psychiatric bed could be found for them somewhere else in Louisiana. An
official at a third facility stated that the facility's case workers
frequently spent all day calling other facilities in the state looking for
an inpatient psychiatric bed. In one case, workers made 39 telephone calls
before locating a facility that would accept the patient.
18The five are Children's Hospital, Ochsner Medical Center, Meadowcrest
Hospital, Touro Infirmary, and West Jefferson Medical Center.
Table 2: Number of Available, Staffed, and Occupied Beds by Type of Care
at Hospitals in the Greater New Orleans Area on April 25, 2006
Percentage of Percentage
occupied to of occupied
staffed beds to
Available Staffed Occupied (occupancy available
Type of care beds beds beds rate) beds
Adult critical care 320 306 295 96 92
Medical/surgical
care 1,100 895 851 95 77
Obstetrics 165 138 94 68 57
Pediatrics 350 262 185 71 53
Psychiatric care 95 57 57 100 60
Other
(rehabilitation,
skilled nursing
care, etc.) 298 220 206 94 69
Total 2,328 1,878 1,688
Source: GAO analysis of data provided by the hospitals in the greater New
Orleans area.
Occupancy rates increased following Hurricane Katrina not only because of
the loss of staffed beds but also because patients on average have been
staying in the hospital longer. According to hospital officials, the
average length of stay has increased by about one-half day because there
is a shortage of facilities to which patients can be discharged, such as
skilled nursing facilities and long-term care facilities. In addition,
because of the extensive destruction of housing, many patients may not
have appropriate housing to which they can return. According to a recent
report prepared for the Louisiana Recovery Authority Support Foundation, a
single-day increase in the average length of stay drives occupancy rates
up about 15 percent.19
Recruiting, Hiring, and Retaining Hospital Staff Posed Significant Challenges
Hospital officials reported that recruiting, hiring, and retaining nurses
and support staff, such as nursing aids, housekeepers, and food service
workers, to staff the available beds constituted a great challenge. The
officials told us that the demand for nurses was greater than the supply
because (1) many nurses left the greater New Orleans area during and after
the storm, (2) there was an insufficient supply of suitable housing for
nurses, and (3) local nurses were being recruited by facilities outside
the greater New Orleans area. According to officials, the hospitals have
been able to reopen beds and keep them open by having employees work
overtime and by paying higher salaries for permanent and temporary
contract staff. However, a shortage of skilled workers remains. For
example, an official at one hospital reported that the hospital had to
temporarily suspend its open heart surgery program because of its
inability to hire operating room nurses and technicians with experience in
open heart surgery, even after offering a salary increase of over 30
percent. Officials also stated that competition from nonhospital employers
for unskilled workers made it difficult for the hospitals to hire and
retain them. For example, whereas the average hourly rate for food service
workers was about $7 per hour before Hurricane Katrina, fast food
restaurants are currently offering about $12 per hour, with one restaurant
chain, for example, offering a signing bonus of about $6,000.
19PricewaterhouseCoopers, Report on Louisiana Healthcare Delivery and
Financing System.
Hospitals Reported High Demand for Emergency Department Services
The hospitals that remained open after Hurricane Katrina have reported a
high demand for services in their emergency departments. Data reported by
some of the hospitals20 showed that wait times for emergency medical
service vehicles to move stable patients from the vehicle into the
emergency department varied from no wait time at one hospital to almost 40
minutes at another hospital for the 30 days between March 28 and April 26,
2006. During the same 30-day period, four of these hospitals reported that
their emergency departments were occasionally at capacity and therefore
temporarily diverted patients to other facilities. The four emergency
departments temporarily diverted patients 8 to 26 times; three of the
departments reported being in diversionary status from 5 to 48 hours. Over
this same period, officials from six of the nine hospitals also reported
that an average of 7 patients per day had to be housed in the emergency
department until a hospital bed was available after a decision had been
made to admit them to the hospital.21 This ranged from 1 patient per day
at one hospital to 18 patients per day at another hospital.
20We obtained information on emergency room wait times for 6 hospitals and
the number of times that 8 hospitals diverted patients to other facilities
for the 30-day period from March 28, 2006, through April 26, 2006.
21Two hospitals did not house any patients in their emergency departments.
The remaining hospital did not answer the question on this topic.
By comparison, demand for emergency medical services in other parts of the
country is also high. For example, the Institute of Medicine reported in
June 2006 that emergency department crowding was a nationwide problem,
with numbers of visits having grown by 26 percent from 1993 to 2003. The
Institute of Medicine also reported that patients are often boarded in the
emergency department for 48 hours or more until an inpatient bed became
available.22 Furthermore, an April 2002 report conducted for the American
Hospital Association found that officials at many hospitals in urban areas
described their emergency departments as operating at or above capacity.23
In addition, we reported in March 2003 that because of a lack of inpatient
beds about 2 in 10 of the 1,489 hospitals we surveyed temporarily diverted
patients from their emergency department more than 10 percent of the
time-or about 2.4 hours or more per day-and nearly 1 in 10 hospitals
temporarily diverted patients from their emergency department more than 20
percent of the time-or about 5 hours per day.24 In our March 2003 report,
hospital officials cited economic reasons for the lack of inpatient beds,
including financial pressures and the inability to staff the available
beds because of difficulty in recruiting nurses or the increased cost of
hiring contract nurses. We also reported that for about 1 in 5 hospitals
the average time that patients remained in the emergency department after
a decision was made to admit them as inpatients or transfer them to other
facilities was 8 hours or more.
Steps Have Been Taken to Reopen University Hospital, but LSU Has No Plans to
Reopen Charity Hospital
FEMA and LSU have prepared damage assessments and cost estimates for
University and Charity hospitals. FEMA's cost estimates for repairs at
Charity and University hospitals are considerably lower than LSU's
estimates. While repairs are under way to reopen portions of University
Hospital beginning this fall, as of July 2006, LSU had no plans to reopen
Charity Hospital. Rather, LSU intends to pursue the possibility of
building a new facility, in collaboration with VA. Meanwhile, LSU has
established temporary facilities to provide some of the hospital functions
previously provided by the two hospitals. For example, LSU established the
MCLNO Emergency Services Unit, which is located in a former department
store, and opened a trauma center at the Elmwood Medical Center.
22Institute of Medicine of the National Academies, Future of Emergency
Care: Hospital-Based Emergency Care at the Breaking Point (Washington,
D.C.: June 2006).
23The Lewin Group, Emergency Department Overload: A Growing Crisis; The
Results of the AHA Survey of Emergency Department (ED) and Hospital
Capacity (Falls Church, Va.: April 2002).
24See GAO, Hospital Emergency Departments: Crowded Conditions Vary among
Hospitals and Communities, GAO-03-460 (Washington, D.C.: Mar. 14, 2003).
LSU's Cost Estimates for Repairing Charity and University Hospitals Are
Considerably Higher Than FEMA's Estimates
LSU's cost estimates for repairing Charity and University hospitals are
considerably higher than FEMA's estimates. Shortly after Hurricane Katrina
struck the greater New Orleans area, LSU hired ADAMS Management Services
Corporation (ADAMS) to assess the condition of the two hospitals. In
addition to identifying safety and health issues with respect to physical
construction and deficiencies, ADAMS was tasked with recommending specific
corrective measures, including cost estimates, to make it feasible to
restore the hospitals to a usable condition. ADAMS completed its
assessment in November 2005.25 According to the ADAMS assessment, Charity
and University hospitals' structural systems, such as columns, beams, and
flooring, were in functional condition, although further testing would be
required to verify this condition. However, the mechanical, electrical,
and plumbing systems were beyond repair, and there were significant
environmental safety problems. ADAMS estimated the repair costs at $257.7
million for Charity Hospital and $117.4 million for University Hospital.
ADAMS also estimated replacement costs at $395.4 million for Charity
Hospital and $171.7 million for University Hospital. On the basis of these
estimates, ADAMS determined that repair costs exceeded 50 percent of the
replacement costs for the two hospitals. As a result, LSU officials told
us they believed that the hospitals met the Public Assistance program
criteria for replacement funding and that LSU could obtain 90 percent of
the estimated cost to replace Charity and University hospitals through the
Public Assistance program.
FEMA's cost estimates for repairing the two hospitals, however, are
considerably lower than LSU's estimates. FEMA completed its initial damage
assessment in December 2005. However, FEMA's initial assessment did not
include elevator repairs because the elevators were not accessible at that
time. FEMA completed its assessment of the elevators in April 2006.26 Like
the assessment ADAMS did for LSU, FEMA's initial assessment found
mechanical, electrical, and plumbing damage, among other things. FEMA
estimated the repair costs, including the elevator repair costs, at $27
million for Charity Hospital and $13.4 million for University Hospital.
FEMA also estimated replacement costs at $147.7 million to $267.3 million
for Charity Hospital and $57.4 million to $103.9 million for University
Hospital. From these estimates, FEMA determined that the repair costs did
not exceed 50 percent of the replacement costs for the two hospitals. (See
table 3 for a comparison of LSU's and FEMA's repair and replacement
estimates.)
25According to LSU officials in May 2006, this assessment, including the
cost estimates, has not changed.
26FEMA also completed damage assessments for all buildings on the Charity
and University campuses, such as Charity's laundry building and
University's pediatrics emergency center. FEMA's rationale for assessing
these buildings is that they are needed to completely restore Charity and
University services. LSU's assessments did not include all these
buildings. Therefore, for comparison purposes, we report only FEMA's and
LSU's cost estimates for the main hospitals on the University and Charity
campuses.
Table 3: LSU's and FEMA's Cost Estimates for Charity and University
Hospitals
LSU's estimates FEMA's estimates
Charity Hospital
Repair estimate (in millions) $257.7 $27
Replacement estimate (in millions) $395.4 $147.7 - $267.3
Repair cost as a percentage of
replacement estimate 65% 10% - 18%
University Hospital
Repair estimate (in millions) $117.4 $13.4
Replacement estimate (in millions) $171.7 $57.4 - $103.9
Repair cost as a percentage of
replacement estimate 68% 13% - 23%
Sources: ADAMS 2005 Emergency Facilities Assessment and FEMA Project
Worksheets.
Notes: FEMA also completed damage assessments for all buildings on the
Charity and University campuses, such as Charity's laundry building and
University's pediatrics emergency center. LSU's assessments did not
include all these buildings. Therefore, for comparison purposes, we report
only FEMA's and LSU's cost estimates for the main hospitals on the
University and Charity campuses. Significant factors contributing to the
differences between FEMA's and LSU's cost estimates are (1) the scope of
work included in the estimates and (2) whether a cost escalator was used
in developing the estimates.
Two significant factors contribute to the differences between LSU's and
FEMA's cost estimates. First, LSU's cost estimates cover whole building
repair, meaning that they include costs for damage from Hurricane Katrina
and many deficiencies that had been identified before the hurricane. For
example, LSU's estimates include costs for installing fire-rated doors and
frames in all exit corridors throughout University Hospital, the lack of
which was identified in 2003 as a problem that needed to be addressed. In
contrast, FEMA's estimates for Charity and University hospitals cover the
repair costs for damage from flooding and wind only, since these are the
only repair costs eligible for federal reimbursement under the Public
Assistance program. Prior deficiencies are generally not eligible for
reimbursement. Second, LSU's estimates also included a 66 percent cost
escalation over a commonly used index of labor and material for New
Orleans. The cost escalation was meant to anticipate material and labor
shortages over the next 3 to 6 years as a result of the hurricane. FEMA's
estimates, in contrast, did not include a cost escalation for labor and
material. According to FEMA, three of the five bids for a recently awarded
contract for the New Orleans Arena were below the federal government
estimate. Based on those bids, FEMA concluded that a cost escalation for
labor and material inflation was not justified.
State officials disputed FEMA's cost estimates of the hurricane damage to
Charity and University hospitals. LSU maintained that these hospitals are
not repairable, as defined by federal regulation. Specifically, LSU
maintained that the cost of repairing the hospitals to their predisaster
condition exceeded 50 percent of the cost of replacing the hospitals and
that it was not feasible to repair the hospitals so that they could
perform the functions for which they were being used immediately prior to
the disaster. In a November 2005 letter to Vice Admiral Thad Allen,27 LSU
noted that "It is not feasible to repair these facilities to restore the
design, function, and capacity, as well as all required code and standard
upgrades, at a reasonable cost." LSU further suggested in the letter that
FEMA's estimated costs were too low, noting that FEMA's estimates did not
include all eligible expenses that might be incurred in completing the
repairs, such as those associated with compliance with the Americans with
Disabilities Act (ADA). For example, the ADAMS assessment includes
accessibility upgrades to bring Charity and University hospitals into
compliance with current ADA requirements, including upgrades to the
restrooms, telephones, and drinking fountains. Officials from OFPC, which
administers the design and construction of all Louisiana state-owned
facilities damaged in Hurricane Katrina, also told us that FEMA's
estimates for the two hospitals were too low and did not reflect the
current market conditions (i.e., the shortage of labor and material).
Officials from both LSU and OFPC provided several examples of FEMA's
underestimating the costs of repairs for facilities in the greater New
Orleans area. For example, FEMA estimated the costs for repair to the
engineering building on the University of New Orleans campus at about
$286,000. The contract was awarded for about $689,000. However, FEMA
officials cautioned against using differences in estimated and actual
repair costs for other facilities as benchmarks for comparing or adjusting
the estimates for Charity and University hospitals, noting that each
facility and its associated estimate are unique.
27Vice Admiral Allen was the Federal Coordinating Officer for FEMA at the
Joint Field Office in Baton Rouge. As of May 25, 2006, he assumed the
duties of Commandant of the U.S. Coast Guard.
To help reconcile FEMA's and LSU's cost estimates, FEMA officials
suggested that LSU select a few projects at Charity Hospital and put them
out for bid. According to FEMA officials, this process would provide
actual repair costs and could serve as a baseline for adjusting LSU's or
FEMA's estimates as needed. FEMA officials noted that some repair projects
at Charity Hospital would be necessary even if LSU opted to replace, not
repair, the facility. Officials from LSU and OFPC told us that they
questioned whether this would be the best use of time and resources,
however, especially since they said they did not believe that restoring
Charity Hospital to its predisaster condition would adequately meet the
health care needs of the community. However, a senior OFPC official told
us that OFPC would evaluate whether some repairs were necessary to prevent
further deterioration of the facility.28
FEMA has begun the process of obligating funds based on its assessments.
As of June 16, 2006, FEMA had obligated about $21.5 million for repairs to
Charity Hospital and $14.3 million for repairs to University Hospital. The
funds are allocated to Louisiana's Office of Homeland Security and
Emergency Preparedness (i.e., the grantee), which then distributes the
funds to LSU (i.e., the applicant) for reimbursement for the costs of
repairing Charity and University hospitals.
28Although state officials dispute FEMA's cost estimates, LSU did not file
an appeal. According to FEMA guidance, applicants, such as LSU, may appeal
FEMA's decisions regarding the provision of assistance, such as FEMA's
cost estimates, to FEMA. The applicant (i.e., LSU) must file its appeal
with the state within 60 days of receipt of a notice of the action that is
being appealed. In turn, the state has a limited amount of time to review
the appeal and submit a recommendation on the merits of the appeal to
FEMA. 42 U.S.C. S: 5189a(a)(2000). According to a FEMA official, FEMA
considers the notice of action the date federal obligations begin. Federal
obligations for University and Charity hospitals started this spring, and
therefore the 60-day window for appeal has expired.
Repairs to University Hospital Are Under Way, and LSU Is Pursuing the
Possibility of a New Facility to Replace Both Charity and University Hospitals
in the Future
At the time of our visit in May 2006, repairs to University Hospital were
under way, and portions of the facility were expected to reopen by late
September or early October 2006, with the remainder of the facility
expected to open by the end of the year. Initially, LSU officials had
hoped to reopen a portion of the facility by the end of June 2006.
However, according to LSU officials, estimates for reopening a portion of
the facility in June-which assumed a 75-day construction schedule-were
optimistic given the amount of repair work needed. An official from OFPC
told us that several contractors estimated it would take 180 days to
complete the work, which was more than 3 months longer than LSU requested.
LSU and the winning contractor ultimately negotiated a 120-day
construction schedule. According to this new schedule, LSU plans to reopen
portions of University Hospital, including inpatient beds, a pharmacy, and
a blood bank, in fall 2006. In addition, LSU plans to convert space on the
first floor of the hospital for a Level I trauma center. This work is
scheduled to be completed by the end of 2006. However, officials from LSU
and OFPC stated that the schedule is subject to change, depending on the
availability of resources and the ability of the contractor to complete
the repair work on time.29 In addition, although LSU plans for University
Hospital to be fully operational by the end of the year, a senior LSU
official told us that LSU is pursuing the possibility of a new hospital
that would allow it to close University Hospital in the future. According
to this official, the building is near the end of its useful life.
While repairs to University Hospital are under way, LSU currently has no
plans to reopen Charity Hospital. Charity Hospital sustained significant
damage as a result of Hurricane Katrina, in large part because of the
flooding that occurred in the basement. In addition, according to
officials from LSU and OFPC, the facility was antiquated prior to
Hurricane Katrina and was not well suited for a modern acute care medical
facility. As a result, LSU does not want to invest significant resources
in repairing the facility and would prefer to invest available funding in
constructing a replacement facility. If LSU decides to replace Charity
Hospital, LSU is authorized under the Public Assistance program to use
funds approved for repair, including the $21.5 million already obligated,
on a replacement facility. However, the amount eligible for reimbursement
cannot be greater than 90 percent of FEMA's initial cost estimates for
repairs.
29To encourage the timely completion of work, LSU's contract includes a
provision for $1,800-per-day payment by the contractor for each calendar
day past the scheduled completion date.
Prior to Hurricane Katrina, LSU had decided to support the construction of
a new facility to replace both University and Charity hospitals, and it
was seeking funding for the project when the storm occurred. LSU continues
to support this option and has taken some initial steps, in collaboration
with VA, to plan for a new facility. Like LSU's Charity and University
hospitals, VA's New Orleans Medical Center sustained extensive damage as a
result of Hurricane Katrina, and VA has determined that the existing
facility is no longer suited for providing patient care. As a result, VA
is also proposing to construct a new facility.30 LSU and VA formed the
Collaborative Opportunities Study Group (COSG) to study options for
constructing a new joint hospital facility. In its June 2006 report, COSG
recommended a "collaborative complex"-that is, separate VA and LSU bed
towers connected by a corridor that houses facilities and services used by
both entities. According to the June report, a collaborative complex would
be more cost-effective than LSU and VA operating stand-alone facilities.31
LSU Has Established Temporary Facilities to Provide Public Hospital Functions
Following Hurricane Katrina, LSU established several temporary facilities
in order to continue to meet the health care needs of the population
currently in the greater New Orleans area and to continue to fulfill LSU's
mission of providing care to the uninsured. Two key temporary facilities
are the MCLNO Emergency Services Unit and the trauma center at the Elmwood
Medical Center. The MCLNO Emergency Services Unit is located in a former
department store in downtown New Orleans. It was originally established in
the parking lot of University Hospital in October 2005. The facility was
moved to the Ernest N. Morial Convention Center in November 2005 and
eventually to its current location in March 2006. According to LSU
officials, the MCLNO Emergency Services Unit provides a variety of
outpatient services, including minor emergency services, dental care,
radiology services, and services for victims of sexual assault, among
others. According to LSU officials, the facility is not equipped to
provide major emergency services. In order to accommodate the services
being provided, LSU set up cubicles and tents to serve as treatment rooms,
storage, conference rooms, and offices. LSU plans to close the MCLNO
Emergency Services Unit in October 2006, when University Hospital is
reopened.
30The Emergency Supplemental Appropriations Act for Defense, the Global
War on Terror, and Hurricane Recovery, 2006 provided VA with an additional
$585.9 million for the construction of major projects for necessary
expenses related to the consequences of Hurricane Katrina and other
hurricanes of the 2005 season. Pub. L. No. 109-234, 120 Stat. 418, 468.
Portions of this funding could be used for a new VA medical center in New
Orleans.
31The COSG report also recognized key issues and challenges that must be
addressed for the joint venture between LSU and VA to move forward, such
as VA's obtaining authorizing legislation. In our April 2006 report that
examined the proposed joint ventures between VA and its medical affiliates
in Charleston and Denver, we also identified potential challenges with
such partnerships, including institutional differences between VA and its
medical affiliates and balancing funding priorities. See GAO, VA Health
Care: Experiences in Denver and Charleston Offer Lessons for Future
Partnerships with Medical Affiliates, GAO-06-472 (Washington, D.C.: Apr.
28, 2006).
LSU is also leasing space for a trauma center from the Ochsner Clinic
Foundation at its Elmwood Medical Center. LSU opened the facility on April
24, 2006, to provide the trauma services previously provided at Charity
Hospital. Charity Hospital served as the only Level I trauma center in the
region.32 According to LSU officials, the trauma center at Elmwood Medical
Center houses a blood bank, laboratory, pharmacy, and treatment rooms,
among other things. In addition, computed tomography and magnetic
resonance imaging services are provided in mobile trailers on the grounds
of the facility. LSU's lease for this space expires at the end of 2006.
HHS Has Provided Financial and Technical Assistance and Program Waivers to Help
Address Restoration
HHS officials said that the agency's efforts to restore hospitals' health
care infrastructure following Hurricane Katrina included financial
assistance, technical assistance, and waivers that allow exceptions to
some program requirements. HHS financial assistance included two
opportunities for hospitals to receive additional funds for infrastructure
repair-SSBG33 that may be used to repair or rebuild health care
facilities, and a Medicare extraordinary circumstances exception that
allows damaged hospitals to receive payment for capital costs. SSBG funds
generally cannot be used for construction; however, the Department of
Defense, Emergency Supplemental Appropriations to Address Hurricanes in
the Gulf of Mexico, and Pandemic Influenza Act, 2006, enacted December 30,
2005, specifically authorized the use of SSBG funds appropriated by that
act for the repair, renovation, and construction of health facilities.34
The act appropriated an additional $550 million to the SSBG program, from
which HHS designated about $221 million for Louisiana in February 2006.
32According to a senior LSU official, LSU's trauma center at the Elmwood
Medical Center does not have Level I status because it is considered a
temporary facility.
33SSBG funds are allocated to the 50 states, the District of Columbia, the
Commonwealth of Puerto Rico, and the territories of Guam, American Samoa,
the Virgin Islands, and the Northern Mariana Islands to furnish social
services best suited to meet the needs of the individuals residing within
the jurisdiction. Jurisdictions receive block grants and determine what
services are provided, the eligible categories and populations of adults
and children, the geographic areas of the jurisdiction in which each
service will be provided, and whether the services will be provided by
jurisdiction, state, or local agency staff or through grants or contracts
with private organizations. 42 U.S.C. S:S: 1397 et seq. (2000).
In addition, four applications were submitted to CMS for assistance to
hospitals in the greater New Orleans area under the Medicare extraordinary
circumstances exception, which provides additional payments for
unanticipated capital expenditures that exceed $5 million (after taking
into account proceeds from other sources, such as insurance or FEMA aid)
and result from extraordinary circumstances, such as hurricanes. The
provision does not provide a lump sum payment up front; instead, it allows
eligible hospitals that serve Medicare patients to depreciate the cost of
the unanticipated capital expenditures over the life of the asset, once
repairs have been made.35 Charity and University hospitals (submitting a
joint application), East Jefferson General Hospital, Tulane University
Hospital and Clinic, and Ochsner Medical Center have applied for this
funding. As part of the approval process, HHS requested that each hospital
provide a plan and a schedule for submission of documents to support its
exception request. As of June 8, 2006, only Charity and University
hospitals had provided estimates of their expected capital expenditures,
which they set at approximately $900 million, an HHS official said.
HHS technical assistance to Louisiana related to restoration of the health
care infrastructure includes both ongoing and planned technical
assistance.36 Since Hurricane Katrina, HHS has assigned staff members to
assist hospitals and other state and local entities in Louisiana in
evaluating health care challenges and identifying available resources. For
example, HHS staff members did the following:
34Pub. L. No. 109-148, 119 Stat. 2680, 2768.
35For most hospitals, the payments under the extraordinary circumstances
exception are based on 85 percent of Medicare's share of allowable capital
costs attributed to the extraordinary circumstance. If approved by CMS,
the qualifying hospitals will receive funds for extraordinary capital
expenditures, based on a formula that considers such things as each
hospital's normal payments through the Medicare Prospective Payment
System. Qualifying hospitals request the depreciation payments on their
Medicare cost reports after the repairs have been made.
36HHS does not have a separate budget for technical assistance. Generally,
the cost of technical assistance activities was absorbed by the various
agencies within HHS, an official said.
o Provided consultation services at Orleans Parish health
planning committee meetings that addressed shortages of staff,
hospital beds, and funding. As a result, an immediate need for
registered nurses was identified, and HHS, in coordination with
VA, made arrangements for 12 to 20 registered VA nurses on 2- to
4-week rotations through mid-April 2006 to provide emergency room,
medical-surgical, and intensive care unit services at Tulane
University Hospital and Clinic.
o Conducted joint weekly teleconferences beginning in January
2006 with the Joint Commission on Accreditation of Healthcare
Organizations, state survey agencies, and hospital and other
health care providers to coordinate the application of
accreditation standards for hospitals that were providing care in
temporary facilities or in facilities damaged by the hurricanes.
o Facilitated meetings between St. Bernard Parish and a nonprofit
medical center that led to the opening of a new primary and urgent
care facility in April 2006 after the parish lost all its health
care facilities during Hurricane Katrina.
Additionally, since Hurricane Katrina, HHS officials have chaired
two federal interagency working groups, the President's Health
Care: Chronic Care and Facilities Restoration Workgroup and HHS's
Gulf Coast Recovery Working Group. The President's Health Care:
Chronic Care and Facilities Restoration Workgroup produced two
major working papers in 2006, a summary of the federal payments
available for providing health care services and rebuilding health
care infrastructure after Hurricane Katrina and a document that
sets out guiding principles for the federal government in the
rebuilding process.37 The federal payments summary served as the
basis for two all-day interagency workshops in New Orleans on
January 10, 2006, and February 9, 2006, sponsored by HHS and
Louisiana, for local and regional health care providers and
elected officials to identify information about available federal
resources and to provide technical assistance in accessing them.
While the President's Health Care: Chronic Care and Facilities
Restoration Workgroup has disbanded, many of its members have been
included in meetings of the Gulf Coast Recovery Working Group. The
Gulf Coast Recovery Working Group is an HHS staff-level group that
meets regularly to resolve issues and offer advice on how to
improve HHS programs supporting the recovery efforts. The Gulf
Coast Recovery Working Group also began working with the
Department of Homeland Security's Office of the Federal
Coordinator for Gulf Coast Rebuilding shortly after the office was
established on November 1, 2005, by Executive Order 13390 to lead
the federal response.38 The Gulf Coast Recovery Working Group
reports to the HHS Secretary and provides input to, and
coordinates on a policy level with, the Federal Coordinator.
Planned technical assistance is part of a broader effort to
redesign the entire continuum of Louisiana's health care delivery
system, from primary care clinics to the restoration of hospital
inpatient care and emergency department services in the greater
New Orleans area, HHS officials said. HHS plans to provide
technical assistance to the Louisiana Healthcare Redesign
Collaborative (Collaborative), a state and locally led effort to
redesign the health care delivery system in Louisiana, including
the existing hospital system.39 HHS's Office of the Secretary
expects to provide technical staff, guidance, and funds to support
the redesign effort. In an address before the Louisiana state
legislature on April 25, 2006, the Secretary of HHS committed to
participating in the redesign effort but emphasized that the
redesign effort must be locally led and governed according to
guiding principles endorsed by all participants. A charter, signed
July 17, 2006, places the Collaborative under the authority of the
Louisiana Department of Health and Hospitals and includes guiding
principles. To help coordinate technical assistance from HHS to
the Collaborative, HHS has hired a full-time senior advisor to the
Secretary of HHS and plans to provide part-time staff from across
HHS agencies. HHS officials said that the agency expected to work
with the Collaborative to develop a health care system recovery
proposal that could include requests for Medicare demonstrations
and Medicaid waivers.40 HHS officials said that they expected that
the redesign effort would produce a more efficient and effective
health care delivery system in Louisiana. HHS officials noted that
prior to Hurricane Katrina, Louisiana had one of the most
expensive health care systems in the United States, but that it
generally ranked close to the bottom among states in terms of
health care quality indicators.
The Secretary of HHS has waived or modified various statutory and
regulatory requirements to assist hospitals and other health care
providers in states in which he had declared a public health
emergency. For example, certain Medicare billing and other
requirements were waived or modified to accelerate Medicare
payments in the hurricane-affected states, including Louisiana.
Under the waivers, HHS has
o paid hospitals the inpatient acute care rate for Medicare
patients that remained in a hospital but no longer required acute
level care, until the patient could be discharged to an
appropriate facility;
o relaxed the data requirements to substantiate payment to the
provider when a facility's records were destroyed;
o allowed hospitals to have a responsible physician (e.g., the
chief of medical staff or department head) sign an attestation of
services provided when the attending physician could not be
located; and
o instructed its payment processing contractors to immediately
process requests for accelerated payments for health care
providers, including hospitals, affected by the hurricane.
In addition, after HHS received inquiries concerning whether
hospitals could provide free office space, low interest or no
interest loans, or other arrangements to assist physicians
displaced by Hurricane Katrina, the Secretary permitted CMS to
waive sanctions for violations of the physician self-referral
prohibition, known as the Stark Law,41 through January 31, 2006.
This time-limited relief concerns statutory prohibitions against a
physician referring Medicare patients to an entity with which the
physician or a member of the physician's immediate family has a
financial relationship. HHS officials said that a waiver had been
approved for one hospital in the greater New Orleans area for one
physician.
HHS officials said that few HHS programs or activities are
designed to help address the restoration of hospital inpatient
care and emergency department services in the greater New Orleans
area. The department does not have broad authority to respond to
the needs of hospitals affected by a disaster, HHS officials said.
They cited several issues that limit the agency's ability to
provide this type of assistance. First, agency officials
emphasized that HHS's role in financing health care services does
not easily translate into providing restoration assistance after a
disaster. Second, HHS must consider whether proposed responses to
problems identified in the greater New Orleans area could
adversely affect other areas of the country. For example,
Louisiana has requested that HHS adjust the wage index used in
determining Medicare prospective payments to hospitals to account
for the higher wages that must be paid to attract or maintain
health care workers, including nurses and physicians, in the
greater New Orleans area. However, HHS officials said that by law,
changes to the wage index must be "budget neutral." Practically,
this means that if the wage index is increased for the greater New
Orleans area, then the wage index must be decreased for another
area, HHS officials said.
Agency Comments
We sent a draft of this report for comment to DHS, HHS, VA, and
the State of Louisiana. Excerpts from it were also sent to LSU for
comment. HHS agreed with the draft report, and its comments are
included as appendix II. VA informed us by e-mail that it agreed
with the draft report. DHS also responded by email and informed us
that it had no formal comments on the draft report. DHS, HHS, and
VA also provided technical comments, as did Louisiana's Department
of Health and Hospitals through an e-mail response. We considered
all technical comments and incorporated those that were
appropriate. LSU did not provide comments.
We are sending copies of this report to the Secretaries of
Homeland Security, Health and Human Services, and Veterans Affairs
and other interested parties. We will also make copies available
to others on request. In addition, the report is available at no
charge on the GAO Web site at http://www.gao.gov . Contact points
for our Offices of Congressional Relations and Public Affairs may
be found on the last page of this report.
If you or your staffs have any questions about this report, please
contact Cynthia Bascetta at (202) 512-7101 or [email protected]
for issues related to health services. Please contact Terrell G.
Dorn at (202) 512-6923 or [email protected] for issues related to
medical facilities and FEMA. GAO staff members who made
significant contributions to this report are listed in appendix
III.
Cynthia A. Bascetta Terrell G. Dorn, PE Director, Health Care
Director, Physical Infrastructure
List of Congressional Committees
The Honorable Susan M. Collins Chairman The Honorable Joseph I.
Lieberman Ranking Minority Member Committee on Homeland Security
and Governmental Affairs United States Senate
The Honorable Charles E. Grassley Chairman Committee on Finance
United States Senate
The Honorable Michael B. Enzi Chairman The Honorable Edward M.
Kennedy Ranking Minority Member Committee on Health, Education,
Labor and Pensions United States Senate
The Honorable Daniel K. Akaka Ranking Minority Member Committee on
Veterans' Affairs United States Senate
The Honorable Thomas M. Davis Chairman The Honorable Henry A.
Waxman Ranking Minority Member Committee on Government Reform
House of Representatives
The Honorable Bennie G. Thompson Ranking Minority Member Committee
on Homeland Security House of Representatives
The Honorable John D. Dingell Ranking Minority Member Committee on
Energy and Commerce House of Representatives
The Honorable Lane Evans Ranking Minority Member Committee on
Veterans' Affairs House of Representatives
The Honorable Nancy L. Johnson Chairman Subcommittee on Health
Committee on Ways and Means House of Representatives
Appendix I: Scope and Methodology Appendix I: Scope and Methodology
To examine the availability of hospital inpatient care and the
demand for emergency department services, we contacted nine
operating public and private hospitals in the greater New Orleans
area.1 We randomly selected one day-April 25, 2006-and asked
hospital officials to provide information on the number of
available, staffed, and occupied beds2 for that day, by type of
patients served, such as critical care, medical and surgical, and
pediatrics. We later asked for the number of available, staffed,
and occupied beds for the entire month of April; however, only
five hospitals responded to this request. From the hospital
officials we also obtained estimates of the occupancy rates for
the 12-month period prior to, and the 9-month period following,
Hurricane Katrina for 8 of the 9 open hospitals. We weighted the
estimated hospital occupancy rates by the number of staffed beds
to obtain a weighed average. Further, we asked about plans to open
more beds and about emergency department services provided for the
30-day period from March 28, 2006, through April 26, 2006.3 We
conducted telephone interviews with senior officials from seven of
the nine hospitals to clarify information provided in their
written responses to our survey.4 We did not independently verify
the data the hospitals provided on bed availability and the amount
of emergency care provided. To determine the April 2006 population
of the four parishes in the greater New Orleans area, we used
estimates from the Louisiana Department of Health and Hospitals
Bureau of Primary Care and Rural Health, which used two
methodologies to estimate the population in each of the parishes.
It used school enrollment data for Jefferson, St. Bernard, and
Plaquemines parishes; and for Orleans Parish it used a survey of
persons occupying residential structures. The survey had been
conducted by the New Orleans Health Department in consultation
with the Centers for Disease Control and Prevention. We limited
our work to examining the status of hospital inpatient and
emergency departments in the greater New Orleans area and did not
examine other aspects of hospital services, such as outpatient
services or the financial condition of the hospitals. We also did
not address other issues related to the health care system, such
as the status of primary care, medical research, or graduate
medical education.
To examine the Federal Emergency Management Agency (FEMA) and
Louisiana State University (LSU) efforts to reopen Charity and
University hospitals,5 we reviewed LSU and FEMA damage assessments
and cost estimates for the facilities, FEMA regulations and
guidance, and the Department of Veterans Affairs' (VA) damage
assessment of its medical center in New Orleans. We toured Charity
and University hospitals and the temporary facilities LSU has
established to provide hospital outpatient care and emergency
department services. We interviewed officials from FEMA; LSU
(including LSU's Health Care Services Division that manages the
public hospitals in the greater New Orleans area); VA because it
is considering building a joint hospital complex with LSU in New
Orleans; the Louisiana Recovery Authority because it is the
planning and coordinating body that was created in the aftermath
of Hurricane Katrina by the Governor of Louisiana to plan for
recovery and rebuilding efforts; and Louisiana's Office of
Facility Planning and Control because it is administering the
design and construction of all Louisiana state-owned facilities
damaged by Hurricane Katrina. We did not independently verify the
damage assessments prepared by FEMA and LSU. We limited our review
to the efforts to restore state-owned public hospital facilities.
To determine the activities that the Department of Health and
Human Services (HHS) has undertaken to help hospitals recover in
the greater New Orleans area, we interviewed officials in various
HHS agencies, including officials in the Centers for Medicare &
Medicaid Services headquarters and Dallas and Atlanta regional
offices, the Health Resources and Services Administration, the
Administration for Children and Families, and the Office of Public
Health Emergency Preparedness. Additionally, we reviewed documents
and summaries outlining HHS programs and activities related to
helping restore hospital inpatient care and emergency department
services after a disaster. Finally, we reviewed applicable federal
law and regulations.
We conducted our work from April 2006 through September 2006 in
accordance with generally accepted government auditing standards.
Appendix II: Comments from the Department of Health and Human Services
Appendix III: GAO Appendix III: GAO Contacts and Staff Acknowledgments
GAO Contacts
Cynthia A. Bascetta (202) 512-7101 or [email protected] Terrell G.
Dorn (202) 512-6923 or [email protected]
Acknowledgments
In addition to the contacts named above, key contributors to this
report were Michael T. Blair, Jr., Assistant Director; Nikki
Clowers, Assistant Director; Karen Doran, Assistant Director;
Jonathan Ban; Michaela Brown; Nancy Lueke; Roseanne Price; and
Cherie Starck.
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37The documents are Summary of Federal Payments Available for Providing
Health Care Services to Hurricane Evacuees and Rebuilding Health Care
Infrastructure and Federal Principles for Rebuilding the Healthcare
Infrastructure in the Gulf States.
38The executive order referred to this position as Coordinator of Federal
Support for the Recovery and Rebuilding of the Gulf Coast Region.
39In June 2006 the Louisiana Legislature approved House Concurrent
Resolution No. 127, creating the Louisiana Healthcare Redesign
Collaborative to serve as an advising body to the Secretary of the
Department of Health and Hospitals for the development of recommendations
and plans for the redesign of the greater New Orleans area health care
system.
40CMS conducts and sponsors Medicare demonstration projects to test and
measure the effect of potential program changes. Demonstrations study the
likely impact of new methods of service delivery, coverage of new types of
services, and new payment approaches on beneficiaries, providers, health
plans, states, and the Medicare trust fund. Medicaid waivers allow states
flexibility in operating Medicaid programs and include waivers that test
policy innovations or that allow states to implement managed care delivery
systems.
4142 U.S.C. S: 1395nn (2000).
1Ten hospitals were operating at the time of our study, but we did not
include Elmwood Medical Center in our survey because it is a temporary
facility that opened on April 24, 2006, after our survey began.
2Available beds are beds that are licensed, set up, and available for use.
These are beds regularly maintained in the hospital for patient use with
supporting services, such as food, laundry, and housekeeping. Available
beds may or may not be staffed. Staffed beds are available beds for which
staff are on hand to attend to the patients who occupy the beds. Staffed
beds may or may not be occupied. Occupied beds are staffed beds that are
being used by patients.
3We obtained information on emergency room wait times for 6 hospitals and
the number of times that 8 hospitals diverted patients to other facilities
for the 30-day period from March 28, 2006, through April 26, 2006.
4Officials from two of the hospitals did not respond to our request for an
interview.
5While part of the statewide LSU public hospital system, Charity and
University hospitals make up the Medical Center of Louisiana at New
Orleans.
(290542)
www.gao.gov/cgi-bin/getrpt? GAO-06-1003 .
To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Cynthia Bascetta at (202) 512-7101 or
[email protected] or Terrell G. Dorn at (202) 512-6923 or [email protected].
Highlights of GAO-06-1003 , a report to congressional committees
September 2006
HURRICANE KATRINA
Status of Hospital Inpatient and Emergency Departments in the Greater New
Orleans Area
In the aftermath of Hurricane Katrina, questions remain concerning the
availability of hospital inpatient care and emergency department services
in the greater New Orleans area-which consists of Jefferson, Orleans,
Plaquemines, and St. Bernard parishes. Because of broad-based
congressional interest, GAO, under the Comptroller General's statutory
authority to conduct evaluations, assessed efforts to restore the area's
hospitals by the Department of Homeland Security's (DHS) Federal Emergency
Management Agency (FEMA); the Department of Health and Human Services
(HHS); and the Louisiana State University (LSU) public hospital system,
which operated Charity and University hospitals in New Orleans. GAO
examined (1) the availability of hospital inpatient care and the demand
for emergency department services, (2) steps taken to reopen Charity and
University hospitals, and (3) the activities that HHS has undertaken to
help hospitals recover. To fulfill these objectives, GAO reviewed
documents and interviewed federal officials and hospital, state, and local
officials in the greater New Orleans area. GAO also obtained information
on the number of inpatient beds for April 2006, which was the most recent
data available when GAO did its work. GAO's work did not include other
issues related to hospitals such as outpatient services or financial
condition.
While New Orleans continues to face a range of health care challenges,
hospital officials in the greater New Orleans area reported in April 2006
that a sufficient number of staffed inpatient beds existed for all
services except for psychiatric care-some psychiatric patients had to be
transferred out of the area because of a lack of beds. Overall, GAO
determined that the area had about 3.2 staffed beds per 1,000 population,
compared with a national average of 2.8 staffed beds per 1,000 population.
Hospital officials told GAO they planned to open an additional 674 staffed
beds by the end of 2006, although they reported that recruiting, hiring,
and retaining nurses and support staff was a great challenge. With these
additional beds, the population would have to increase from 588,000 in
April 2006 to 913,000 by December 2006 before staffed beds would drop to
the national average. Hospitals also reported a high demand for emergency
services, consistent with a June 2006 Institute of Medicine report, which
found that emergency department crowding is a nationwide problem.
Steps have been taken to reopen University Hospital, but as of July 2006,
LSU had no plans to reopen Charity Hospital. LSU plans to open portions of
University Hospital in fall 2006 and would like to replace both hospitals
with a new one. LSU and FEMA have prepared cost estimates to repair these
hospitals. For Charity Hospital, FEMA's estimate of $27 million is much
lower than LSU's estimate of $258 million, which covers, for example,
repairing hurricane damage and correcting many prestorm deficiencies. In
contrast, FEMA's estimate covers repairs for hurricane damage only-the
only repair costs eligible for federal reimbursement.
HHS provided financial assistance and waived certain program requirements
to help hospitals recover in the area. For example, HHS included $221
million in hurricane relief funds designated for Louisiana through Social
Services Block Grants, which may be used in part to reconstruct health
care facilities. HHS also waived certain Medicare billing and other
requirements and accelerated Medicare payments to providers, including
hospitals, in the hurricane-affected states.
Rebuilding the health care infrastructure of the greater New Orleans area
will depend on many factors, including the health care needs of the
population that returns to the city and the state's vision for its future
health care system. In light of the current sufficiency of hospital beds
for most inpatient services, GAO believes a major challenge facing the
greater New Orleans area is attracting and retaining enough nurses and
support staff.
HHS and the Department of Veterans Affairs (VA) agreed with the draft
report. DHS said it had no formal comments on the draft. HHS, VA, DHS, and
Louisiana's Department of Health and Hospitals provided technical
comments, which GAO incorporated where appropriate. LSU did not provide
comments.
*** End of document. ***